Moody's: Stability likely for Mexico's housing sector

A recent report from Moody's Investors Service said the rating outlook for the Mexican housing sector is stable.

The stability is based on the federal government's support for the housing industry, as well as the continued demand for homes. The growing ranks of young people, especially those occupying the low-income sector, is fueling the demand, Moody's said.

"Moody's expects Mexican government entities, such as INFONAVIT and Sociedad Hipotecaria Federal, to continue to play active roles in the mortgage market," the report's author, analyst Angela Burriesci, said in a written statement. Burriesci said the Sofoles, or non-bank financial institutions that grant mortgages, primarily to the low-income sector, will be key in providing mortgage financing.

"In recent years, the larger Sofoles have benefited from consolidation, which has helped make them, and the housing finance industry in general, more efficient and productive. Several Sofoles have also successfully accessed the capital markets with debt issuances in Mexico and abroad," she said.

Mexican homebuilders continue to play an important affordable housing role because of their focus on lower-end construction, she said. Like the Sofoles, some of the larger developers have issued debt in the public markets.

Moody's said that it expects the Sofoles and homebuilders to continue to expand their businesses while maintaining their profitability and credit metrics.

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